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Defining your apartment cost in 2024
There’s always a buzz of excitement in the air when one start thinking about buying or renting an apartment in Malta or Gozo, as it is requires considerable financial commitment no matter which way you look at it. Anything real estate and construction related on the islands form an important part of the local economy and at times it can lead to heated debates, whether it is about location or cost, specific property types, design and more.
There are a number of factors that determine the overall cost of an apartment in Malta for 2024 and staying informed about these should be a priority for any prospective buyer or tenant. Generally, these factors include the size and location of the apartment, the quality of the construction, the inherent amenities, the proximity to other amenities, the state of the local economy and of course the local property market overall.
We take a look at what determines the cost of an apartment:
1. The location
The location of an apartment is one of the single biggest factors that determine its price. Apartments in popular areas of Malta like Sliema and St Julian’s are typically more expensive than apartments elsewhere. This is because these locations are more desirable and they are often close to top attractions and great amenities plus apartments here are easy to rent out all year. Due to the limited land available in Malta and Gozo, space comes at a premium and this applies especially to very popular towns and villages. In locations like these, the only way to deliver more apartments is to build upwards.
Always keep an eye on future plans for any location you may be interested in: should there be development coming in the form of roads and infrastructure, schools, commercial and retail centres, you can rest assured that the value of properties in the area will increase dramatically. Therefore buying early on in the locality will be an excellent investment…so knowing everything planned at present and in the future for your preferred location is very important. Speak to your estate agent about this, as they will be informed long before anyone else in this regard.
2. Outdoor areas and spaces
Having outdoor space plays a huge role when it comes to the price and desirability of any apartment, but there are associated responsibilities to consider if this is at the top of your list of must-haves! We look at some of the advantages and disadvantages of outdoor space:
- Access to fresh air and natural light: Outdoor spaces provide a source of natural light and fresh air, which are essential for physical and mental well-being.
- Extended living area: Especially in smaller apartments, an outdoor space can function as an additional living area where you can relax, dine, or entertain guests.
- Opportunity for gardening: Even a small balcony or terrace can be used for gardening, allowing residents to grow plants, flowers, or even a small vegetable garden.
- Improved mental health: Being in a natural, outdoor environment can reduce stress, improve mood, and increase feelings of happiness and calm.
- Better ventilation: Outdoor spaces can improve the ventilation of an apartment, reducing the risk of mould and improving air quality.
- Increased property value: Apartments with outdoor spaces often have a higher market value and can be more attractive to potential buyers or renters.
- Recreational space: It provides a private space for outdoor activities like yoga, reading, or simply enjoying a cup of coffee in the open air.
The possible disadvantages:
- Maintenance: Outdoor spaces require regular maintenance, including cleaning, gardening and possibly repairing outdoor furniture.
- Limited privacy: Depending on the design, outdoor spaces in apartments can be overlooked by neighbours or passers-by, leading to a lack of privacy.
- Weather dependence: The use of the outdoor space is often limited by weather conditions, which can be a significant drawback in areas with harsh climates.
- Noise pollution: Balconies or terraces facing busy streets can be exposed to noise pollution, which might be disturbing for some residents.
- Security concerns: Ground-floor outdoor spaces may raise security concerns, and even higher floors can be a point of vulnerability if not properly secured.
- Space limitations: The size and shape of the outdoor space may limit its functionality. For instance, a small balcony might not accommodate more than a chair and a small table.
- Increased costs: Apartments with outdoor spaces might have higher rent or purchase prices and they can potentially increase the cost of heating (in case of poor insulation) or maintenance fees.
Balancing these positives and negatives is key to determining the value of an outdoor space in an apartment setting. For many, the benefits outweigh the drawbacks, especially in urban areas where access to private outdoor space is a luxury.
3. Apartment size
More bedrooms and bathrooms obviously results in an increase in price, but bigger is not always better. Assess your needs and choose an apartment accordingly. It is of no use having rooms that you will never utilise or outside spaces that are abandoned most of the year. That said, clever buyers will see the potential for future extensions and plan accordingly when an apartment comes with extra space. Never subdivide large bedrooms or remove baths to have only showers, as this will cause problems in the future when reselling. Consult with an experienced estate agent that specialises in the area for advice, should you have any plans for the remodelling of an apartment.
4. Construction quality and finishes
Apartments that have been well constructed with quality materials, have good insulation and have been finished off to high standards will achieve higher prices and be infinitely more desirable, as potential purchasers will have nothing to fix when they move in. This also means the maintenance over time will be minimal and things will last for years to come. So yes, quality apartments do cost more.
5. Amenities
If an apartment has excellent amenities such as communal gardens, a swimming pool, state-of-the-art security, a gym or ample parking, the price will definitely be higher than others of similar size that do not have this. Apartments that are located further away from basic amenities such as shops, medical facilities or bars and restaurants will often be cheaper than those within walking distance of the aforesaid amenities.
6. Views
This is very high on nearly every buyer’s wish list! Views are extremely desirable and can account for 3-5% of the value of a property’s asking price, but in some rare cases it can be a lot more. Apartments with open sea or country views cost more and keep in mind that there is no such a thing as a guaranteed view… unless your apartment is on a cliff edge, directly opposite the sea, or very high up in a building.
With on-going construction all over Malta and Gozo, the view you have today may not be there tomorrow. If you are after an apartment with a view that is guaranteed as “forever”, speak to your agent as they will give you their realistic and informed opinion.
7. The influence of demand
High demand for apartments in Malta and Gozo typically drives prices up, as more potential buyers or renters compete for the limited supply of properties. Economic factors such as employment rates, average income levels and the general health of the economy can affect people’s ability to purchase or rent, thereby influencing demand as well. In Malta the ever-increasing numbers of tourists play a big role with an insatiable demand from the rentals market for accommodation. Local investors tend to buy many additional properties for rental purposes and this creates a huge demand year after year.
8. Supply
As said, quality apartments in Malta and Gozo are immensely popular for investment purposes, so the supply is relatively limited and this also contributes to pushing prices upwards. Construction projects are visible everywhere you look on Malta and Gozo, but there never seems to be enough apartments to go around. Developers, private owners and even we at Frank Salt Real Estate find ourselves inundated with enquiries for apartments, especially in medium range bracket. This pressure from the market for more apartments is unlikely to end soon.
The outlook for Malta in 2024
According to all the experts, the property market in Malta is expected to remain strong for the rest of 2024 and demand will continue to outstrip supply. However, there are a number of factors that could potentially see prices increase at a more modest pace, but Malta has continuously beaten the odds by outperforming many other EU real estate markets.
The final word
If you are considering buying an apartment in Malta or Gozo as you main residence or as a rental investment, it is important to do your research and understand the factors that will affect the price. Always consider your budget and your needs when making a decision. We have more than 55 years of experience in assisting buyers and sellers of apartments and as Malta’s oldest and largest real estate group, contact us first. Your interests will be well served!
